Bite-Sized Scenario Training

Managing Stakeholders
Bite-Sized Scenario Training

Managing Stakeholders
Bite-Sized Scenario Training
This e-book is published by Mind Tools Ltd.
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Version 2.0.
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Contents

1.

Introduction

2.

Analyzing Stakeholders

3.

Stakeholder Prioritization

4.

Stakeholder Engagement

5.

Scenarios

6.

Suggested Solutions

7.

Key Points

11

8.

Apply This to Your Life

12

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

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1. Introduction

takeholders are people or organizations that have some kind of interest in,
and influence on, your project. They might lend you their support if theyre
keen for you to succeed; they could oppose you if they are suspicious or
nervous of the consequences of the project. But they wont be able to help
or hinder if they have little power.
Your chances of success depend very much on your understanding of these
dynamics. You need to know who your stakeholders are and get them on your
side, whether they are the paying client, the obvious end user, or someone in the
background who has the power to pull strings.
For example, if you were a condominium developer, youd be wise to do an
extensive analysis of contractors and sub-contractors, to find out whether they are
reliable people who will get the project done. And who are your potential buyers?
Will there be a market for your condos once theyre built? Do you know how the
local media are likely to react? Which city hall officials could authorize (or dismiss)
your entire project and what would convince them to decide in your favor?
Imagine that youre planning the development to be next to the home of a city
councilors son: you might run into problems if he believes that the project will
affect his quality of life. Failure to identify him, and address his concerns, might
mean the difference between developing the land or not. So, this neighbor is a
hidden but important stakeholder in terms of your projects success.
You can address these sorts of issues by carrying out a well-planned stakeholder
analysis. Youll need to identify as many stakeholders as you can, and understand
their power and influence. Then, you can work on strategies to maximize their
positive impact on the project, and minimize their negative impact.
Stakeholder management is a very proactive approach to project success.
Effective leaders understand this dynamic and use it to their advantage. In
this Bite-Sized Scenario Training session, youll learn what stakeholder
management is about, and well work through two scenarios that will test your
understanding. By the end you will:

Be able to identify key stakeholders in a project.

Know how to prioritize your stakeholders influence.
Understand the basics of stakeholder engagement, and how you can win
support for your project.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

2. Analyzing Stakeholders

o run a project successfully, you need the right people outside the project
doing the right things to support it. Your stakeholders might have an
active role in developing the project or in using its end result. They often
have some level of ownership of it, and have knowledge and expertise
that will help shape its direction. But they may also be negatively affected, and
lurking in the background, where their influence is difficult to see until its too late.
The most important thing for you to do is to start thinking straight away about the
wide variety of people who are able to influence your project. To help you identify
them, consider the following groups:
Project team members they produce the results, and are responsible for
the details and the planning.
Consultants these people assist the project team members by supplying
subject matter expertise or technical support. They can come from within
the organization or outside it.
Consumers they decide whether to buy the product or service.
Users these people actually use and benefit from the results. They have
direct contact with the product and could be the consumers too.
Sponsors the official supporters of the project, they help a project
manager get what he or she needs to run it successfully. Although they are
outside the project team, they significantly influence its decisions.
Other influencers they can impact your success in other ways and
include investors, professional associations, public interest groups,
government representatives, your competitors, and your employees.
For more on identifying stakeholders, read our Stakeholder Analysis article.
You might find that everyone in the world seems to have a say in your projects
success! But you wont be investigating them all: youll only look in depth at the
ones who have a significant amount of influence. These are your key stakeholders.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

3. Stakeholder Prioritization

o, how can you decide which of your stakeholders are key?

There are various factors to consider, but producing a Power-Interest Grid is
a good place to start. The grid is a 2x2 matrix that plots stakeholders power
to influence your project against their interest in it.

The stakeholders positions in the matrix help determine how youll deal with
them if at all.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

 High Power and High Interest stakeholders (those in the top right
panel of the grid) are your key stakeholders. If they feel positive about the
project, they will be powerful supporters. If they feel negative, they could
do a lot of damage. So, you must manage them closely, keeping them fully
informed and engaged, and win them round if you need to.
High Power but Low Interest stakeholders (in the top left panel of the
grid) need occasional but appropriate information. If their interest grows,
they could become key stakeholders.
High Interest but Low Power stakeholders (bottom right of the grid),
will expect frequent communication. Choose a cost-effective way to keep
them informed, so that they feel positive towards your project and, if they
gain more power, will contribute to its success.
Low Interest and Low Power stakeholders (bottom left) might become
more interested or powerful in time, so dont ignore them. Instead,
monitor their positions and be prepared to address any concerns they
have promptly, particularly if they move to other quadrants of the grid.
Bear in mind that any stakeholder might experience outside pressures that
change his impact. For example, a group might be pushed to achieve someone
elses goals, which conflict with yours. This hidden agenda may drive them
to demonstrate more interest and power than you anticipated. In contrast,
someone who appeared very supportive at the beginning could lose impact
if he experiences a sudden crisis at work or home that demands all his time
and attention.
So, youll need to take into account some subtle variables as you map stakeholders
on the Power-Interest Grid. Dont rush the exercise! Ask yourself lots of questions
and try to anticipate these peoples reactions to your plans and to external forces.
See our Stakeholder Analysis article for some useful questions to ask as you work
through the process.
To practice conducting a stakeholder analysis, see our Bite-Sized Training session
on Stakeholder Management.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

4. Stakeholder Engagement

hen you are confident that you know who your stakeholders are, and
understand the type of relationship you need to have with each of
them, youll need to devise a communication plan.

Avoid becoming complacent with stakeholders who are positive

towards you already. If you fail to maintain your good relationship, they might not
be there when you need them. Remember, too, that you cant afford to dismiss the
people who dont support you; you simply have to create a different engagement
approach to minimize the damage they could cause. You could even plan to win
them over!
So, go through the stakeholders and decide what you want or need from each:

Level of support?
Type of role?
Actions?
Next, think about what you will need to communicate to the stakeholders to
establish and maintain their engagement:

Design a Whats in it for me? message for each group.

Finally, create a communication and action plan to win the support (or neutralize
the threat) of your stakeholders:

What are the stakeholders expectations?

How can you increase their interest and motivation?
How frequently will you contact them and through what channel?

For more details on this engagement process, see our article, Stakeholder
Management: Planning Stakeholder Communication. It includes a planning
worksheet to help you organize your communication strategy and keep track of
the messages for each stakeholder.
Its easy to lose focus with this process, because it can seem to be just common
sense to start with. In reality, however, there are often many more key
stakeholders than you might think of at first, and its easy for urgent project
activities to push stakeholder management issues onto the back burner.
Stakeholder management takes time and effort, so keep yourself motivated by
remembering the risks and the benefits:

If you fail to identify stakeholders early on, youll experience real problems
as the project moves forward and it might not even get off the ground.
If youre patient and spend time on your initial planning, your reward will
be a much smoother-running and more successful project.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

5. Scenarios

H
the end.

ere we look at two scenarios in which a project team makes crucial

mistakes in identifying and analyzing its stakeholders.
As you read each scenario, think about how you would do things
differently. Make a note of your observations and answer the questions at

Scenario One
Stakeholder Identification
Nelson leads a product development team at an educational publishing company.
His objective is to develop a new product for teaching mathematics to elementary
school children.
The regional School Board has decided to purchase the product based on the
descriptions and examples already provided. The publishers CEO spearheaded
the project because he was frustrated with the way math was taught to his own
children. Hed tried out a variety of tutoring services and just couldnt find a
product that taught the right concepts and made learning fun.
The project team did a stakeholder analysis and decided it was important that the
CEO and his kids were involved in the testing. Even though the purchase decision
was already made, they made sure they kept the Board informed of developments.
They set up field tests with groups of students to gauge their reaction to the
product. They also consulted with key outside suppliers to make sure they could
manufacture the product cost effectively.
The testing went very well. The children and the CEO thought the product was
great. The Board was very pleased with all the progress and the product looked
like it would be profitable.
Nelson and his team figured they had covered all their bases so they were very
surprised to learn that, after six months in schools, the product was not a success.
Only 37 percent of classes were using it regularly and almost 25 percent had
stopped using it all together.
At first, the team thought the issue was training, so it went back and conducted
follow-up sessions with teachers. Another three months went by and the results
were unchanged.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

Question 1:
What do you think went wrong? How would you have managed the key stakeholders differently?

Scenario 2
Stakeholder Analysis
Cindy recently started a video game development company. She is heading up its
newest project to develop a fantasy adventure game (her previous games were
either puzzles or childrens games). The up-front research and development costs
of this kind of large-scale game are huge. However, she has found an investor
willing to fund this side of the product, as hes a very keen gamer himself and sees
the market for quality products in this genre.
Financing will be provided in stages over the next year and the investor will
approve each further release of money. Cindy and the team begin their research.
They identify end users as key stakeholders in their success. They also look at
what the retail market needs and what online retailers and buyers are purchasing.
Through discussions with industry representatives, and focus groups with
consumers, they learn that they all want highly realistic games. The team begins to
develop a realistic adventure game that it is confident will sell well.
The team sticks to its budget figures and there are no major setbacks. The money
continues to be released on schedule. When Cindy has the basic concept and shell
of the game built, she invites key industry people and a targeted consumer group
to provide feedback. The response is very positive. She prepares a detailed report
for the investor and includes some of the feedback comments, thinking that he
will be excited to learn more about the game and peoples reaction to it.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

Unexpectedly, the investor pulls his support for the project and Cindy and her
team are left scrambling. They dont understand: the feedback from industry and
consumers was great. No one had seen a game quite like it before, and they were
all pleasantly surprised that a company with success in the childrens and puzzles
market could produce such a realistic game about crime and drug culture.
Question 2:
What went wrong? How would you suggest moving the project forward now? What are the
repercussions of the ill-executed stakeholder analysis?

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

6. Suggested Solutions

Scenario One: Suggested Solution

Stakeholder Identification
What do you think went wrong? How would you have managed the key
stakeholders differently?
Nelson and his team missed a crucial stakeholder group: teachers. Even though
teachers arent the people purchasing the product, they are the people who
ultimately determine the products success.
Nelson needed their buy-in as users of the product. The kids reaction is important,
but teachers need to be motivated to use the product in the first place. Kids might
also love a new video game but that doesnt mean the teachers are going to use it
in the classroom.
So in this instance, even without the monetary purchase decision, teachers are the
buyers of things they choose to include in their daily curriculum.
Nelson should have included the teachers in early product development stages
and done extensive testing with them. Allowing the teachers to provide feedback
along the way would have improved buy-in and probably improved the overall
quality of the product.

Scenario Two: Suggested Solution

Stakeholder Analysis
What went wrong? How would you suggest moving the project forward now?
What are the repercussions of the ill-executed stakeholder analysis?
The team failed to adequately assess all stakeholders interests. It focused on
two very important groups: the industry and users. Unfortunately, it didnt
communicate enough with the investor. Although the industry desires realistic
crime-based games, not everyone will support this type of product. In fact there is
a strong backlash against these games, due to feared links to real-life violence and
reenactments of the scenes.
This new game is also a significant departure from the companys previous focus.
There was no indication it would move into producing violent video games, so this
significant change in direction should have been brought up much earlier in the
development process.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

Knowing that the investor was involved for both commercial and personal
interest, Cindy should have kept him informed along the way. He was given
financial information but not product information. His power and interest are both
high, yet he was treated as a high power but low interest stakeholder.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

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7. Key Learning Points

uccessful project management depends on how well we plan and control

the many steps involved in reaching our goals. But its important to
remember that other people can have a major impact on our projects
outcome, no matter how detailed or skillful our planning is.

Your stakeholders interest and power can be an irritation, a threat, or an

opportunity to win useful support for your project.
This session looked at:

Identifying who your stakeholders are.

Understanding and prioritizing your stakeholders potential impact.
Harnessing your key stakeholders influence through
effective engagement.

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

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8. Apply This to Your Life

hink about what youve learned about stakeholder management from

these scenarios. How can you apply these lessons to projects that youre
working on at the moment? For example:

Who are the stakeholders in your projects? Are you sure youve
identified all of those who have high power and a high interest?
What are you doing to manage these important stakeholders? Are
you doing what you should to communicate with them?
What adverse impacts could your projects suffer if you dont manage
the stakeholders appropriately?
When you examine a proposed project to decide whether to go
ahead, are you considering how stakeholders might react? If not,
why not, and what are you going to do about this?

Managing Stakeholders Bite-Sized Scenario Training | Mind Tools

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